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No.211(2016/5/1)
Economic and Labour Situation in Japan (May 2016)

RENGO (Japanese Trade Union Confederation) carried out its fourth tally of wage hike settlements reached as of the end of April in the 2016 Spring Struggle for a Better Life.

RENGO's survey revealed that 3,400 unions that had demanded average wage hikes for members and engaged in labour-management negotiations had reached settlements by that time. The average wage hike in these settlements (including the regular wage hike) was 5,948 yen, the equivalent of 2.03% of the average wage before the hike.

Of unions with fewer than 300 members, 2,289 unions had extracted settlements. The average wage hike in these settlements (including the regular wage hike) was 4,558 yen, 1.87% of the average wage before the hike. The average wage hike of union members in companies with more than 1,000 employees was 6,280 yen, 2.06% of the average wage before the hike.

The regular wage hike of union members in companies with fewer than 300 members is estimated to be around 4,000 yen. By contrast, the regular wage hike of union members in companies with more than 1,000 employees is estimated to be around 5,560 yen.

The negotiations of small and medium-sized unions will continue until May.

Industrial Production
Industrial production is fluctuating indecisively. In March it increased 3.6% over the previous month, registering an increase for the first time in two months and up 0.1% year-on-year. The index in March was 96.6 (seasonally adjusted).

Industries that mainly contributed to the increase were as follows: (1) transport equipment, (2) general-purpose, production, and business-oriented machinery, and (3) fabricated metals, in that order.

According to the Survey of Production Forecast in Manufacturing, production was expected to increase 2.6% in April and decrease 2.3% in May.

Family Income and Expenditure Survey in March
Japan's household spending in March suffered the biggest annualized fall in nearly a year.
(1) Expenditure for Two-or-More-Person Households
The average monthly consumption expenditure per two-or-more-person household in March was 300,889 yen, sharply down 5.3% in nominal terms and 5.3% in real terms year-on-year.

(2) Income and Expenditure for Workers' Households
The average monthly income per household stood at 450,698 yen, up 0.3% in nominal terms and 0.3% in real terms year-on-year. The average consumption expenditure was 334,609 yen, down 4.9% in nominal terms and 4.9% in real terms year-on-year.

Labour Force Survey Monthly Results
The unemployment rate has been sound in the 3.2%-3.4% range since March 2015, the lowest level in the last 19 years. Japan has likely achieved full employment and faces a severe shortage of labour, which is an obstacle for the world's third-largest economy as it struggles to break away from deflation.
(1) Employment
The number of employed persons in March was 63.39 million, an increase of 200,000, or 0.3%, over the previous year.

(2) Unemployment
The number of unemployed persons in March was 2.16 million, a decrease of 120,000, or 5.3%, from the same month in the previous year. The seasonally adjusted unemployment rate in March was 3.2%, down 0.1 point from the previous month. The unemployment rates for men and women were 3.5% and 3.0%, respectively.

(10,000 persons)
  March figures Change from previous year
      (%)
Population aged 15 years or over 11,075 1 0.0
Labour force 6,555 8 0.1
Employed persons 6,339 20 0.3
Employees 5,649 69 1.2
Unemployed persons 216 –12 –5.3
Not in labour force 4,516 –5 –0.1
Labour force participation rate (%) 59.2 0.1
Employment rate (%) 57.2 0.1
Unemployment rate, original series (%) 3.3 –0.2
  Current month Change from previous month
Unemployment rate, seasonally adjusted (%) 3.2 –0.1

Japan's job availability in March registered the best level in 24 years, with the ratio of job offers to jobseekers standing at 1.30, up 0.02 point over the previous month. This figure means that there were 13 jobs available for every 10 jobseekers.

Consumer Prices
The consumer price index in March was 103.3 (2010 = 100), up 0.1 point over the previous month and down 0.1% over the same month of the previous year. The inflation rate remains far below the 2% target set by the Bank of Japan, which expects to achieve that goal around the second half of the fiscal year starting April 2017.

March 2016
Index Monthly
change (%)
Annual
change (%)
All items 103.3 0.1 –0.1
All items, less fresh food 102.7 0.1 –0.3
All items, less food (less alcoholic beverages) and energy 101.3 0.3 0.7
All items, less imputed rent 104.2 0.1 0.0
(10 Major Group Index)
Food 108.3 –0.1 2.6
Housing 99.0 0.0 –0.1
Fuel, light, and water charges 109.5 –0.7 –8.5
Furniture and household utensils 94.0 0.2 0.2
Clothes and footwear 105.3 2.7 2.1
Medical care 100.1 0.2 0.8
Transportation and communication 100.6 –0.1 –3.0
Education 103.2 0.0 1.7
Culture and recreation 99.3 0.3 1.7
Miscellaneous 110.1 0.1 0.8
(Goods and Service Group Index)
Goods 103.9 0.0 –0.5
Services 102.6 0.1 0.4
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